It's the perfect time for a price on carbon

Published Tuesday, January 6, 2015 in the New Brunswick Telegraph Journal and the Fredericton Daily Gleaner.

It’s funny how opportunities sometimes appear out of the blue.

Through serendipity and the nuances of global markets, NB, Canada and any other jurisdiction serious about emission reduction have been handed a golden opportunity to implement a policy that can reduce greenhouse gas emissions and simultaneously raise money to fund energy efficiency programs.

The opportunity is plummeting energy prices; the policy is putting a price on carbon.

The opportunity

Who could have imagined, even a few months ago, that gasoline prices would ever again dip below a dollar? They were last at that level in 2010, and we’ve spent the past four years glumly getting used to a new ‘normal’ price of $1.20 to $1.30. We’d mostly accepted that a dollar a litre, a price which years ago sounded so expensive, was likely the great deal we’d never see again.

Yet here we are: gas prices in New Brunswick are as low as 90 cents a litre, thanks to Saudi Arabia and its OPEC friends. No wonder we can barely contain our glee at the pumps; just saving a dime would have delighted us, and here we are saving three dimes.

The policy

As countries around the world struggle to come to grips with the need to reduce greenhouse gas emissions caused by the burning of oil, coal and natural gas, one policy has emerged as the best way to accomplish that goal: put a price on carbon. Call it whatever you want – a tax, a fee or a levy – one thing is clear: people consume less of something when it costs more. We may talk a great line about our concern for the environment, but most of us are guided much more by our money compasses than our moral compasses.

To be fair, putting a price on carbon is not an easy sell in a democracy. We voters are notoriously unforgiving these days, ready to kick out any government that dares chip away at our entitled conveniences.

And any carbon pricing system must be revenue-neutral: all revenues collected must be given back in one form or other, preferably through energy efficiency incentives and programs. People quickly lose their enthusiasm for anything they perceive as just another tax grab.

But when it comes to lowering emissions, carbon pricing works. British Columbia implemented a modest carbon tax in 2008, edging it upwards each of the next four years. The result? BC’s emissions have declined by 16 per cent.

Over the same period, BC’s economy has outperformed Canada’s. “All of the naysayers who suggested that a carbon tax was going to be an economic disaster have been proven wrong,” Premier Christy Clark said last month.

Could that reality finally be gaining traction in Ottawa? Prime Minister Harper, long a fierce opponent, actually acknowledged that carbon pricing could work in his year end interview with the CBC (even if he nearly choked on the word ‘levy’).

Timing

From the perspective of voters or politicians, could there ever be a better time to put a price on carbon? The prices of oil, coal and natural gas prices have all fallen in recent months.

BC’s carbon tax is seven cents per litre of gasoline – an amount that could have been (and could still be) implemented here with comparatively minimal fuss. Imagine the money that could be raised relatively painlessly, even in this cash-starved province. Hello, a rejuvenated Efficiency NB with more programs than ever. Hello, incentives on electric vehicles. Hello, lower provincial emissions.

Today’s low energy prices – normally an incentive to consume more – provide us with a rare opportunity lower our emissions and fund much-needed programs to help get us off fossil fuels. Federally and provincially, carbon pricing is an opportunity worth pursuing.